Abstract: The rapid expansion of higher education mainly pushed by local universities since the beginning of 21st century is due partly to the incentives of local governments to increase land value and land fiscal revenues. Through establishing a prefecture-level panel data model, this paper conducts a quantitative analysis. The results show that the scale of higher education has significantly raised the average price of land leasing: an increase of 10,000 college students at campus will result in an average increase of land price by 15.12 ~ 16.54 yuan per square meter. The promotion effect of land leasing prices in the cities of the second category (non-municipalities, non-capital cities and non-cities specifically designated in the state plan) is higher than that in the cities of the first category (municipalities, capital cities and cities specifically designated in the state plan), which means that the cities of the second category have a stronger incentive to expand the scale of land revenue by developing higher education. Moreover, the regression result identifies the unobserved heterogeneity effects: the unobserved factors of the first category cities have restricted the price increase of land leasing while promoting the expansion of higher education significantly; in contrast, the unobserved factors of the second category cities have increased the average price of land leasing while promoting the expansion of higher education.

Key words: higher education expansion; remising price of land; panel data sample selection model